Question: Diversification refers to the process of: using the correlation between securities to increase risk and hence expected return. reducing risk by holding only U.S. Government

Diversification refers to the process of:

using the correlation between securities to increase risk and hence expected return.

reducing risk by holding only U.S. Government bonds.

reducing risk by investing in securities that are not perfectly positively correlated.

increasing expected return by investing in more than one security.

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